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Nytimes.com Meter Could Alienate Valuable Readers

NEW YORK (AdAge.com) -- If The New York Times goes ahead with a plan to install a meter instead of a pay wall on its website, as New York Magazine is reporting, it will be tackling one problem with charging for online access while running headlong into another.

A meter that only asks the site's heaviest users to pay will retain the vast majority of the site's visitors and its opportunities to sell ads in front of them. But The Times has to be careful with those heaviest users, who are also becoming more and more important to ad sales on its site.

On the positive side, a meter will curtail free reading on The New York Times online, but it will confront fewer people than even a partial pay wall, the kind The Wall Street Journal uses on its site. And if the meter isn't converting enough of those heavy users into paying visitors, The Times could theoretically adjust it to confront an even smaller proportion of visitors.

"The metering method gives you more flexibility," said Ken Doctor, a media analyst at Outsell. "If you're The Times and start to see, 'Uh oh, we're starting to lose too much traffic,' you can turn the dials in a different direction."

The risk, however, is that The Times will be fiddling with its most loyal readers, a group that's becoming increasingly important to ad sales across the web. Like other sites, The Times has more data on its heaviest users than it has on less frequent visitors, so it can show them more appropriate advertising. They generate more page views on the site and see more of its ads. And advertisers often like site loyalists more than the people who pop in for a single story, unknown consumers who arrive through search results or social media and then disappear again.

"If you know more about those people than you would about your average reader, you can better serve them the advertising they want, which is more appealing to advertisers," Mr. Doctor said. "Not only do you know more about them, but their proportion of the site's use is greater."

The heaviest users, the ones The Times is reportedly about to start challenging with online fees, are therefore the last ones any site wants to drive away.